Seven Examples or Calculations of Income From Salaries During the F.Y.2014-15
UPDATE INCOME FROM SALARIES DURING THE FINANCIAL YEAR 2014-15;
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Example 1
(A) Calculation of Income tax in the case of an employee (Male or Female) below the age of sixty years and having gross salary income of:
i) Rs.2,50,000/- ,
ii) Rs.5,00,000/- ,
iii) Rs.10,00,000/-
iv) Rs.20,00,000/-.
v) Rs. 1,10,00,000/-
(B) What will be the amount of TDS in case of
above employees, if PAN is not submitted by them to their
DDOs/Offices:
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
Rupees (iv)
|
Rupees (v)
|
Gross Salary Income (including
allowances)
|
2,50,000
|
5,00,000
|
10,00,000
|
20,00,000
|
1,10,00,000
|
Contribution of G.P.F.
|
45,000
|
50,000
|
1,00,000
|
1,00,000
|
1,00,000
|
Computation of Total Income and tax payable thereon
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
Rupees (iv)
|
Rupees (v)
|
|
Gross Salary
|
2,50,000
|
5,00,000
|
10,00,000
|
20,00,000
|
1,10,00,000
|
|
Less: Deduction U/s 80C
|
45,000
|
50,000
|
1,00,000
|
1,00,000
|
1,00,000
|
|
Taxable Income
|
2,05,000
|
4,50,000
|
9,00,000
|
19,00,000
|
1,09,00,000
|
|
|
|
|
|
|
|
|
(A)
|
Tax thereon
|
Nil
|
18,000*
|
1,05,000
|
3,95,000
|
3095000
|
Surcharge
|
|
|
|
|
309500
|
|
Add:
(i)
Education Cess @ 2%.
(ii)
Secondary
and Higher Education
Cess @1%
|
Nil Nil
|
360
180
|
2100
1050
|
7,900
3950
|
68090
34045
|
|
Total tax payable
|
Nil
|
18,540
|
1,08,150
|
406850
|
3506635
|
|
|
|
|
|
|
|
|
(B) TDS under sec. 206AA
in case where PAN is not furnished
by the employee
|
Nil
|
90,000
|
1,30,000
|
406850
|
3506635
|
|
* includes Rebate of Rs 2000 u/s
87A
Example 2
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent (With valid PAN furnished to employer).
S.No.
|
Particulars
|
Rupees
|
1
|
Gross Salary
|
4,00,000
|
2
|
Amount spent on treatment of a dependant, being person with
disability (but not severe
disability)
|
7000
|
3
|
Amount paid to LIC with regard to annuity for the maintenance of a dependant,
being person with disability( but not severe disability)
|
60,000
|
4
|
GPF Contribution
|
25,000
|
5
|
LIP Paid
|
10,000
|
6
|
Interest Income on Savings Account
|
12,000
|
Computation of Tax
S.No.
|
Particulars
|
Rupees
|
1
|
Gross Salary
|
4,00,000
|
2
|
Add: Income from Other Sources
Interest Income on Savings Account
|
Rs 12,000
|
3
|
Gross
Total Income
|
4,12,000
|
4
|
Less: Deduction U/s 80DD (Restricted to Rs.50,000/- only)
|
50,000
|
5
|
Less: Deduction U/s 80C (i) GPF
Rs.25,000/-
(ii) LIP Rs.10,000/- = Rs.35,000/-
|
35,000
|
6
|
Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-)
|
10000
|
7
|
Total Income
|
3,17,000
|
8
|
Income Tax thereon/payable
(includes Rebate of Rs 2000 as
per Section 87A)
|
4,700
|
9
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
94
47
|
10
|
Total Income Tax
payable
|
4,841
|
11
|
Rounded
off to
|
4,840
|
Example 3
Calculation of Income Tax in the case of an employee below age of sixty years where medical
treatment expenditure was borne by the employer (With valid PAN furnished to employer).
S.No.
|
Particulars
|
Rupees
|
1
|
Gross Salary
|
5,20,000
|
2
|
Medical Reimbursement by employer on the treatment of self and dependent family member
|
35,000
|
3
|
Contribution of GPF
|
20,000
|
4
|
LIC Premium
|
20,000
|
5
|
Repayment of House Building Advance
|
25,000
|
6
|
Tuition fees
for two children
|
60,000
|
7
|
Investment in Unit-Linked Insurance Plan
|
30,000
|
8
|
Interest Income on Savings Account
|
8,000
|
9
|
Interest Income on Time Deposit
|
15,000
|
Computation of Tax
S.No.
|
Particulars
|
Rupees
|
1
|
Gross Salary
|
5,20,000
|
2
|
Add: Perquisite in respect of reimbursement
of Medical Expenses
In excess of Rs.15,000/- in view of
Section 17(2)(v)
|
20,000
|
3
|
Income from Other Sources
i) Interest Income
on Savings Account Rs 8,000
ii) Interest Income on Savings Account Rs
15,000
|
23,000
|
4
|
Gross
Total Income
|
5,63,000
|
5
|
a.Less: Deduction U/s 80C
(i) GPF Rs.20,000/-
(ii)
LIC Rs.20,000/-
(iii)
Repayment of House Building Advance Rs.25,000/-
(iv)
Tuition fees
for two children Rs.60,000/-
(v)
Investment in Unit-Linked Insurance
Plan Rs.30,000/-
Total =Rs.1,55,000/-
Restricted
to Rs. 1,50,000/-
b. Less: Deduction u/s 80TTA on Interest Income on savings
account (restricted to Rs 8000/- available only on Savings account interest) Rs 8,000/-
Total deduction available Rs 1,58,000/-
|
1,58,000
|
6
|
Total Income
|
4,05,000
|
7
|
Income Tax thereon/payable
(includes Rebate of Rs 2000 as
per Section 87A)
|
13,500
|
8
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
270
135
|
9
|
Total Income Tax
payable
|
13,905
|
10
|
Rounded
off to
|
13,910
|
Example 4
Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).
S.No.
|
Particulars
|
Rupees
|
1
|
Salary
|
3,50,000
|
2
|
Dearness Allowance
|
2,00,000
|
3
|
House Rent Allowance
|
1,40,000
|
4
|
House rent paid
|
1,44,000
|
5
|
General Provident Fund
|
60,000
|
6
|
Life Insurance
Premium
|
4,000
|
7
|
Subscription to Unit-Linked Insurance Plan
|
50,000
|
Computation of total income and tax payable thereon
S.No.
|
Particulars
|
Rupees
|
1
|
Salary + Dearness Allowance + House Rent
Allowance 3,50,000+2,00,000+1,40,000 =
6,90,000
|
6,90,000
|
2
|
Total Salary Income
|
6,90,000
|
3
|
Less: House Rent allowance exempt U/s 10(13A):
Least of:
(a). Actual amount of
HRA received= 1,40,000 (b).
Expenditure of rent
in excess of 10% of
salary
(including D.A. presuming that D.A.
is taken
for retirement benefit)
(1,44,000-55,000) = 89,000
(c). 50% of Salary(Basic+ DA) = 2,75,000
|
89,000
|
4
|
Gross
Total Income
|
6,01,000
|
5
|
Less: Deduction U/s 80C
(i). GPF Rs.60,000/-
(ii). LIC Rs. 4,000/-
(iii). Investment
in Unit-Linked Insurance
Plan Rs.50,000/-
Total =Rs.1,14,000/-
|
1,14,000
|
6
|
Total Income
|
4,87,000
|
7
|
Tax payable on total income
(includes Rebate of Rs 2000 as
per Section 87A)
|
21700
|
8
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
434
217
|
9
|
Total Income Tax
payable
|
22351
|
10
|
Rounded
off to
|
22350
|
Example 5
Illustrating
valuation of perquisite and calculation of tax in the case of an employee
below age of sixty years of a private company
in Mumbai who was provided
accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid
PAN furnished to employer).
S.No.
|
Particulars
|
Rupees
|
1
|
Salary
|
7,00,000
|
2
|
Bonus
|
1,40,000
|
3
|
Flat at
concessional rate (for
ten month). = Rs.3,60,00
|
3,60, 000
|
4
|
Hotel rent paid by employer (for two month)
|
1,00,000
|
5
|
Cost of furniture
|
2,00,000
|
6
|
Free gas, electricity, water etc. (Actual bills paid by company)
|
40,000
|
7
|
Rent recovered from employee
|
60,000
|
8
|
Subscription to Unit Linked
Insurance Plan
|
50,000
|
9
|
Life Insurance
Premium
|
10,000
|
10
|
Contribution to recognized P.F.
|
42,000
|
COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:
S.No.
|
Particulars
|
Rupees
|
|
1
|
Salary
|
7,00,000
|
|
2
|
Bonus
|
1,40,000
|
|
3
|
Total Salary(1+2) for the purpose of valuation of perquisites (12 months)
|
8,40,000
|
|
Valuation of
perquisites
|
|||
4(a)
|
Perquisite
for flat:
Lower of (15% of salary
for 10 months
= Rs.1,05,000/-) and (actual
rent paid= Rs 3,60,000) i.e. Rs. 1,05,000/-
Less : Rent recovered Rs.
60000/-
|
Rs 45,000
|
1,38,600
|
4(b)
|
Perquisite
for hotel :
Lower of (24% of salary of 2 months=Rs 33,600) and (actual payment= Rs 1,00,000)
|
Rs 33,600
|
|
4(c)
|
Perquisites for furniture
@ 10% of cost
of Rs.2,00,000
|
Rs 20,000
|
|
4(d)
|
Perquisite for free
gas, electricity, water etc.
|
Rs 40,000
|
|
4
|
Total
|
1,38,600
|
|
5
|
Gross Total Income
(Rs.8,40,000+ 1,38,600)
|
9,78,600
|
|
6
|
Gross Total Income
|
9,78,600
|
|
7
|
Less: Deduction
U/s 80C:
(i). Provident Fund (80C) :
Rs.42,000/-
(ii). LIC (80C) :
Rs.10,000/-
(iii). Subscription to Unit Linked Insurance
Plan(80C) : Rs.50,000/-
Total = Rs.1,02,000/-
|
1,02,000
|
|
8
|
Total Income
|
8,76,600
|
|
9
|
Tax Payable
|
1,00,320
|
|
10
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
2,006
1,003
|
|
11
|
Total Income Tax
payable
|
1,03,329
|
|
12
|
Rounded off to
|
1,03,330
|

Example 6
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private
Company posted at Delhi and repaying
House Building Loan (
With valid PAN furnished
to employer).
S.No.
|
Particulars
|
Rupees
|
1
|
Salary
|
4,00,000
|
2
|
Dearness Allowance
|
1,00,000
|
3
|
House Rent Allowance
|
1,80,000
|
4
|
Special Duties Allowance
|
12,000
|
5
|
Provident Fund
|
60,000
|
6
|
LIP
|
10,000
|
7
|
Deposit in NSC VIII issue
|
30,000
|
8
|
Rent Paid by the
employee for house hired by her
|
1,20,000
|
9
|
Repayment of House Building Loan (Principal)
|
60,000
|
10
|
Tuition Fees
for three children (Rs.10,000 per child)
|
30,000
|
Computation of total income and tax payable thereon
S.No.
|
Particulars
|
Rupees
|
1
|
Gross Salary (Basic+DA+HRA+SDA)
|
6,92,000
|
|
Less: House rent allowance exempt U/s 10 (13A) Least of:
(a). Actual amount of
HRA received. :Rs. 1,80,000 (b).
Expenditure on rent
in excess of 10% of
salary
(Including D.A.)assuming D.A. is
included for
retirement benefits (1,20,000- 50,000) :Rs. 70,000
(c). 50% of salary (including D.A) :Rs. 2,00,000
|
70,000
|
2
|
Gross Total Taxable Income
|
6,22,000
|
|
Less: Deduction U/s 80C
(i). Provident Fund :
Rs. 60,000
(ii). LIP :
Rs. 10,000
(iii). NSC VIII
Issue :
Rs. 30,000
(iv). Repayment
of HBA : Rs. 60,000 (v).
Tuition
Fees (Restricted to two children) : Rs.
20,000
Total : Rs. 1,80,000
Restricted
to Rs. 1,50,000
|
1,50,000
|
|
Total Income
|
4,72,000
|
|
Income Tax thereon/payable
(includes Rebate of Rs 2000 as
per Section 87A)
|
20,200
|
|
Add:
(i). Education
Cess @2%
(ii). Secondary
and Higher Education Cess @1%
|
404
202
|
|
Total Income Tax
payable
|
20,806
|
|
Rounded
off to
|
20,810
|
Example 7
A. Calculation of Income tax in the case of a retired
employee above the age of sixty years but below the age of 80
years and having gross pension of:
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
Gross Pension
|
4,50,000
|
8,00,000
|
12,50,000
|
Contribution of P.P.F.
|
70,000
|
1,00,000
|
1,50,000
|
B .What will be the amount of TDS in case of
above employees, if PAN is not submitted by them to their
DDOs/Offices:
Computation of Total Income and tax
payable thereon
Particulars
|
Rupees (i)
|
Rupees (ii)
|
Rupees (iii)
|
Gross Pension
|
4,50,000
|
8,00,000
|
12,50,000
|
Less: Deduction U/s 80C
|
70,000
|
1,00,000
|
1,50,000
|
Taxable Income
|
3,80,000
|
7,00,000
|
11,00,000
|
|
|
|
|
Tax
thereon (A)
|
6,000
|
60,000
|
1,50,000
|
Add:
(i)
Education Cess @ 2%.
(ii)
Secondary
and Higher Education Cess @1%
|
120
60
|
1200
600
|
3000
1500
|
Total tax payable
|
6,180*
|
61,800
|
1,54,500
|
|
|
|
|
B. TDS
under sec. 206AA in case where PAN is
not furnished by the employee
|
16,000
|
80,000
|
1,60,000
|
*includes Rebate of Rs 2000 as per Section 87A
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